Wills v NSW Trustee

By a summons filed on 11 August 2022 the plaintiff applies to the Court under Part 2.2 Division 2 (sections 18-26) of the Succession Act 2006 NSW for:

The fact that a person is a “protected person” within the meaning of section 38 of the NSW Trustee and Guardian Act 2009 is not, of itself, proof of a lack of testamentary capacity: Perpetual Trustee Co Limited v Fairlie-Cunninghame (1993) 32 NSWLR 377. A person may be incapable of managing his or her affairs and still have the capacity necessary to make a will.

The protected person is a 92 year old widow on the verge of death. She is presently in palliative care at St Vincent’s Hospital in Sydney. The evidence before the Court includes a short report dated 8 August 2022, from a doctor at the Hospital specialising in geriatric medicine, to the effect that she is an inpatient under his care “with delirium on background moderate dementia”. Based on that diagnosis the report asserts that the protected person “currently does not have capacity to make any financial, medical and accommodation decisions nor ability to change her will”.

The protected person’s husband died in July 2020, aged 98 years, leaving a will dated 29 August 1999 which left the whole of his estate to the protected person.

On the evidence presently available, the protected person appears to have made a mirror will on 29 August 1999, leaving the whole of her estate to her husband, a will of no practical effect since his death.

The protected person’s estate, including her inheritance under her late husband’s will, has an estimated value of about $7.2 million.

The major asset of the estate is a property at North Bondi comprising (on the one title) the former family home of the protected person and her husband and an adjoining rental property.

The evidence presently before the Court establishes the following facts:

On the evidence before the Court, as a neighbour of the protected person, the plaintiff was a good friend to the protected person before the protected person became a resident of a nursing home, and she has continued as a good friend since that time.

As evidenced by the course of proceedings in NCAT, the plaintiff actively resisted what she (on reasonable grounds) perceived to be attempts by the protected person’s tenant, for his own personal benefit, to assume control of the affairs of the protected person with a view to acquisition of the property of the protected person and her husband at North Bondi.

Although it can be accepted that the plaintiff was, and remains, genuinely interested in the welfare of the protected person as a paramount consideration, the evidence lends itself to a finding that she may also have been active in her own interests.

On 8 October 2020 (shortly after NCAT appointed the NSW Trustee to manage the protected person’s estate instead of the protected person’s tenant and, on a separate occasion, confirmed the plaintiff’s appointment as the protected person’s guardian) the plaintiff made a representation to the NSW Trustee, in its capacity as the protected person’s financial manager, for funding to enable the protected person to make a will. The representation was based on a statement that the protected person had requested that she make a will following the death of her husband in July 2020.

The NSW Trustee approved funding. That led to the plaintiff, on notice to the NSW Trustee, retaining solicitors (Bartier Perry) for the purpose of taking instructions from the protected person (then a nursing home resident) for the preparation of a will.

Between 19 October 2020 and 16 February 2021 or thereabouts Bartier Perry made several unsuccessful attempts to persuade the protected person to execute a will. She consistently declined, even when warned that her will dated 29 August 1999 was no longer effective and that, if she dies intestate, her estate could pass to the State. Bartier Perry appears never to have obtained instructions to prepare a will in any terms.

File notes in the Bartier Perry file record various statements by the protected person to the effect that, after the death of her husband, she had no family and did not know to whom she might leave her estate. At one point (on 2 December 2020) she said that she did not know whether she wanted to leave anything to her neighbours and (in a separate comment) that she did not know who she could “trust”.

The file notes (for example, on 1 and 4 December 2020) record occasional interaction between the plaintiff and the protected person as the plaintiff encouraged the protected person to make a will. They also record (for example, on 22 October 2020 and 4 November 2020) a growing antagonism by the protected person towards her tenant, a state of mind consistent with her discovery (no later than 14 September 2020) of the will dated 5 December 2018 that the tenant had, without notice to her, arranged for her husband to execute in his favour.

The file notes record that on various occasions (including 22 October 2020 and 3 and 4 November 2020) the protected person had drawn to her attention the possibility that her intestate estate would be likely to pass to the State. A fair inference from the various file notes read together is that, although the protected person did not want this to happen, she was not greatly troubled by it. When pressed on 4 November 2020 to make a will to prevent her estate passing to “the government” she is recorded to have said, verbatim: “I’ll do something when I feel up to it and if it’s too late then it can just go to the government.”

A file note dated 22 October 2020 suggests that the protected person had turned her mind to the possibility of testamentary gifts to charities, but could not think of any charity she wanted to name as a beneficiary.

A file note dated 27 October 2020 records the following exchange between the Bartier Perry solicitor and the protected person:

The same file note contains passing references to both the plaintiff and the protected person’s tenant. It also records a statement by the solicitor to the effect that, although, in his assessment, the protected person had testamentary capacity she appeared still to be grieving the loss of her husband and, for that reason, unable to think about things like a will for herself.

About seven months after Bartier Perry closed their file the plaintiff says (and she is corroborated in this by a member of the staff of the protected person’s nursing home) that the protected person dictated, and she transcribed, the handwritten informal will that purports to leave the whole of the protected person’s estate to the plaintiff.

If that is correct, why is a statutory will necessary? And what would be the effect of the Court authorising the making of a statutory will to the same effect as the informal will? There is no apparent necessity for a statutory will save, possibly, to minimise opportunities for a competing claimant or, more likely, in this case, the State to challenge the “validity” of the informal will.

Upon an application for admission of the informal will to probate, the application for grant of representation would have to be advertised to the public at large whereas, in the context of an urgent application for a statutory will, the practical reality is that the means for advertising the application are confined by the nature and timing of the application.

Evidence adduced in support of the application for a statutory will includes evidence corroborating the plaintiff’s evidence that she has a close relationship with the protected person and has for some time rendered assistance to the protected person.

The tenor of this evidence is that, in the absence of any competing claims on the bounty of the protected person, the plaintiff would be a worthy recipient of the protected person’s estate. That is not, however, the test to be applied by the Court upon assessment of an application for a statutory will.

Section 18(1) of the Succession Act provides, inter alia, that the Court “may, on application by any person, make an order authorising” a will to be made “in specific terms approved by the Court, on behalf of the person who lacks testamentary capacity”.

Section 19(1) of the Act provides that “[a] person must obtain the leave of the Court to make an application to the Court for an order under section 18”.

Section19(2) provides that “[in] applying for leave, the person must (unless the Court otherwise directs) give the Court” information on a range of topics.

Section 20(1) provides that on hearing an application for leave the Court may:

Section 22 is of critical importance. It is in the following terms:

Section 21 provides that, in considering an application for an order under section 18, the Court may have regard to any information given to it in support of an application for leave and may inform itself of any other matter in any manner it sees fit, not being bound by the rules of evidence.

Sections 23-26 inclusive deal with topics not presently material: a requirement that a statutory will be signed by a registrar of the Court and sealed with the seal of the Court (section 23); arrangements for retention of a statutory will (section 24); separate representation of a person to whom a statutory will is sought to be made (section 25); and recognition of statutory wills made outside NSW (section 26).

Adopting the reasoning of the Queensland Court of Appeal in GAU v GAV [2016] 1 Qd R 1; [2014] QCA 308 at [39]-[52], as adapted to NSW in Re K’s Statutory Will (2017) 96 NSWLR 69; [2017] NSWSC 1711 at [21], I make the following observations about the requirement in section 19(1) of the Succession Act that there be a grant of leave to make a statutory will application:

But for the “informal will” dated 24 September 2021 upon which the plaintiff relies as evidence of the protected person’s testamentary intentions in her favour, there is no evidence to support a finding that the statutory will proposed by the plaintiff (to paraphrase section 22(b)) is, or is reasonably likely to be, one that would have been made by the protected person if she had testamentary capacity.

The contents of the Bartier Perry file confirm a reluctance on the part of the protected person to make any will, including a will that favoured a neighbour such as the plaintiff, and a preparedness to die intestate even if that meant that “the Government” took the benefit of her estate.

At my invitation, a solicitor from the NSW Trustee on 12 August 2022 attended upon the protected person in hospital to see whether she was capable of engagement in conversation about her estate. Not much can be taken from the transcript of that attendance because the protected person was physically too weak to engage actively. Nevertheless, the transcript includes the following exchange (edited to omit the protected person’s name):

For all the confusion displayed by the protected person during the NSW Trustee’s solicitor’s interview with her, she appears to have had some consciousness of what was being asked of her, and her responses were consistent with her disinclination to make a will when invited by Bartier Perry to do so.

The medical report of St Vincent’s Hospital dated 8 August 2022 is consistent with the possibility that any “current” incapacity to make a will discerned at that time was a function of the protected person’s delirium rather than an immutable lack of testamentary capacity. Nevertheless, it is sufficient to satisfy me that (in terms of section 22(a) of the Succession Act) “there is reason to believe that” the protected person “is, or is reasonably likely to be, incapable of making a will”.

That does not mean, however, that there is no utility in taking into consideration any “current” expression of her views. One of the topics required, by section 19(2)(e) of the Succession Act, to be addressed by an applicant for leave to apply for a statutory will is “any evidence available to the applicant of the … wishes” of the person “on whose behalf” (to paraphrase section 18(1)) a court-authorised will is sought to be made.

Viewing the evidence as a whole, I am not satisfied (as section 22(b) of the Succession Act requires that I must be) that the proposed statutory will “is, or is reasonably likely to be”, one that would have been made by the protected person if she had testamentary capacity. Over a substantial period of time (albeit several months before she has said to have executed an informal will) she deliberately resisted invitations made to her by Bartier Perry and the plaintiff to make a will. Despite her weakened state, there remains an echo of that resistance in her conversation with the solicitor from the office of the NSW Trustee on 12 August 2022.

Whatever may have been her capacity and state of mind on 24 September 2021 (when the plaintiff contends that she dictated and signed an informal will), I am not satisfied that, if possessed of testamentary capacity, she would now, or at any foreseeable future time, make a will leaving her entire estate to the plaintiff.

Nor am I satisfied that it “is or may be appropriate” (within the meaning of section 22(c)) for an order to be made authorising the proposed statutory will in circumstances in which the forensic object of the application for a statutory will, viewed objectively, is to pre-empt any challenge to the informal will ostensibly made in favour of the plaintiff.

The present proceedings are not an appropriate vehicle for testing the “validity” of the informal will. The occasion for that is on an application for its admission to probate. The evidence relied upon by the plaintiff in support of the informal will has not been tested forensically in the current proceedings in circumstances in which there is no contradictor with an interest in objecting to the instrument, and the time frame within which the Court has been required to make a decision has not permitted full inquiries to be made. The appropriate time to test the provenance of the informal will is upon an application for its admission to probate if and when the protected person dies.

In the meantime, the absence of a representative of the State (the State having been given no notice of the proceedings) is, by virtue of section 22(e) of the Succession Act, an impediment to the plaintiff’s application for a grant of leave under section 19. On the evidence currently before the Court, if the protected person dies intestate, her estate is likely to pass to the State under section 136 of the Evidence Act 1995 NSW for want of any person entitled to it under Chapter 4 of the Act.

In my opinion, the State is a “person with a legitimate interest” in the plaintiff’s application within the meaning of section 22(e). Section 21 of the Interpretation Act 1987 NSW defines a “person” as including a “body politic”. Section 136 of the Succession Act recognises the State’s interest in an intestate estate to which no other person is entitled. In a case such as the present, there is also a public interest in the State being available as a contradictor.

If, upon the death of the protected person, the informal will is propounded, it may be necessary or appropriate that the State be given specific notice of the application for probate or administration. With the benefit of specific notice, the State might decide not to challenge admission of the will to probate. It might, on the other hand, take the view that it should put the plaintiff to proof of her contention that the informal will is the last expression of testamentary intentions of a free and capable testatrix. Such an approach might be thought to be in the public interest because (by analogy with principles governing proof of a formal will in probate) the informal will was prepared and executed in circumstances sufficiently “suspicious” to require affirmative proof (such as section 8 of the Succession Act implicitly requires in any event) that the protected person “knew and approved” the contents of the instrument as a will. At all material times, the plaintiff was the protected person’s guardian and, as a neighbour, a person who provided care and assistance for the protected person. She was in a fiduciary relationship with the protected person.

Even if the protected person is found to have died intestate, leaving no person entitled to her intestate estate, it would be open to the plaintiff to make an application to the State (under section 137 of the Succession Act) for a waiver of the State’s rights in her favour as a person who claims to have “a just or moral claim on the intestate”.

Be that as it may, in my opinion, it is not appropriate that the Court grant leave to the plaintiff to apply for a statutory will in terms which, in substance, do no more or less than legitimise an informal will which she says the protected person executed in her favour. It is not apparent to me that the plaintiff’s application in any material way is for the benefit, and in the interests, of the protected person when viewed in light of the informal will and her anticipated death.

I am not satisfied of the matters for which section 22(b), (c) and (e) provide. The plaintiff’s application for leave to apply for a statutory will must be refused. Accordingly, I propose to order that the summons be dismissed.

As the NSW Trustee (in its capacity as financial manager of the protected person) authorised the plaintiff’s application to the Court, I propose to order, further, that the costs of both parties be paid out of the estate of the protected person on the indemnity basis. This is in conformity with the practice, upon an exercise of protective jurisdiction, that orders for costs are made by reference to the question of what is the proper order in all the circumstances of the case and not, routinely, by reference to the ordinary rule of civil litigation that costs follow the event.

Subject to allowing interested persons an opportunity to object, I propose to order that the exhibits in evidence before the Court be entrusted to the NSW Trustee (in its capacity as financial manager of the protected person and as the executor named in her informal will) for safekeeping. They are likely to be required if an application for admission of the informal will to probate is made and, more especially, if contested.

Orders and notations to the following effect are made in disposition of the proceedings (with editorial adaption to anonymize the protected person):